Ireland must meet its contractual commitments on promissory notes issued in respect of Anglo Irish Bank, the head of the European Central Bank Mario Draghi said today, adding that the ECB would consider the issue.

At a special meeting of the European Parliament’s Economic and Monetary Affairs Committee today, Irish MEP Gay Mitchell asked if the ECB would consider recasting the terms of Ireland’s promissory notes, given the problems with cashflow that had hit the economy.

“The existing terms of the contract are the terms of the contract. At present time contractual commitments must be met,” Mr Draghi said, adding that the ECB would “continue to reflect” on the issue.

Challenges remain ahead for Ireland in restructuring the banking system and regaining market access, he said.

Following the meeting, Mr Mitchell said “it was not ‘no’ for the future”.

The promissory note issue dates back to 2010, when the then-government committed to paying €31 billion to Anglo-Irish Nationwide in the form of such notes. These could then be presented by the banks as collateral to receive exceptional liquidity assistance (ELA) from the Central Bank, which in turn borrows money from the European Central Bank (ECB).

Speaking this afternoon, Minister for Public Expenditure and Reform Brendan Howlin said the Government was engaged with the EU-ECB-IMF troika and was negotiating on a range of issues that involving Irish economic sovereignty.

"I’ve said many times before this is a process not an event," he said. "We’ve made significant progress in our first year in our six formal interactions and our many informal ones and we’ll continue to make progress until we get back into a position where we can fund ourselves in a normal way through markets."